Sony Doubles Down on Entertainment, Expects to Sell 25 Million PS5 Consoles This Financial Year
gadgets.ndtv.comSony Group on Thursday said it is examining a partial spin-off of its financial business just three years after taking full control, as the conglomerate doubles down on entertainment and image sensors.
Sony said it is considering a time frame of two to three years to spin off Sony Financial Group — whose operations include life insurance and banking — with an eye to listing the business and retaining a stake of slightly under 20 percent.
Given the capital the business requires, "it is a challenge to balance this with our investment in other growth areas such as entertainment and image sensors," Sony Chief Financial Officer Hiroki Totoki told a strategy briefing.
The conglomerate is pursuing synergies between its business lines, which include video games, music and movies. It said hit drama The Last of Us on television network HBO drove uptake of the game franchise on which it is based and the music used.
A partial spin-off of Sony Financial, which the group said was made possible by changes in tax rules, would allow the newly listed business to retain Sony branding.
"It doesn't change anything drastically in terms of the outlook for Sony but it does make it a more pure play entertainment company which the market generally likes," said Mio Kato, an analyst at LightStream Research who publishes on Smartkarma.
The finance business reported a 5 percent fall in revenue to YEN 1.45 trillion (nearly Rs. 87,190 crore) in the year ended March. Operating profit rose 49 percent helped by a one-off gain from a real estate sale.
In the current financial year, Sony expects a 40 percent drop in revenue at the unit due to an accounting change, and a 20 percent drop in profit due to the absence of the year prior's one-off gains.
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